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Brown outlines 'eco towns' plan

http://news.bbc.co.uk/1/hi/uk_politics/6650639.stm

Gordon Brown says he wants five new "eco towns" built to help people onto the property ladder, as he continues his campaign to succeed Tony Blair.
He said he wanted the 100,000 homes in "carbon neutral" communities to be built on old industrial sites, such as former Ministry of Defence property.

Mr Brown told the BBC he wanted the total number of homes built each year increased, with more social housing.

He is so far unchallenged in his bid to succeed Tony Blair as Labour leader.

The proposed five "eco towns" could each contain up to 20,000 homes, funded with a mixture of public and private finance.

It reflects concern over the growing demand for homes, which has driven up housing prices, making it more difficult for young couples attempting to get on the property ladder.

But the Conservatives say that carbon neutral towns were announced by Labour over a year ago.
 

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There was a good article in the Observer on this topic. If their journalist is right, what we are talking about is the creation of development coorporations styled on the model of the LDDC, which will stand above local authorities and will be able to put in their own infrastructure. If correct, then he is basically going to clean up Prescott's mess of abundant and overlapping agencies with no real powers (Thames Gateway is a good example) and returrn to something closer to Heseltine's model.

http://observer.guardian.co.uk/business/story/0,,2078216,00.html

The artcile talks also about the intentions to sort out planning in the UK, which is indeed very good.
 

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Brown outlines 'eco towns' plan

http://news.bbc.co.uk/1/hi/uk_politics/6650639.stm

Gordon Brown says he wants five new "eco towns" built to help people onto the property ladder, as he continues his campaign to succeed Tony Blair.
He said he wanted the 100,000 homes in "carbon neutral" communities to be built on old industrial sites, such as former Ministry of Defence property.

Mr Brown told the BBC he wanted the total number of homes built each year increased, with more social housing.

He is so far unchallenged in his bid to succeed Tony Blair as Labour leader.

The proposed five "eco towns" could each contain up to 20,000 homes, funded with a mixture of public and private finance.

It reflects concern over the growing demand for homes, which has driven up housing prices, making it more difficult for young couples attempting to get on the property ladder.

But the Conservatives say that carbon neutral towns were announced by Labour over a year ago.
He really is New Labour through and through. Unless they are suddenly going to build an extra 100,000 house in less than 10 years it's not going to have much of an effect on house prices and the affordablilty for first time buyers.
And it will only lower prices in the immediate areas that these new homes are going to be built

The current distortions in the housing market are of this governments own makings. Stamp duty has not kept pace with house prices. Time was that very few paid stamp duty or only 1% when they moved. Now the average stamp duty in the South East is £8,000. The governments own targets in increasing density have been mainly met by building flats.

Buy to let has distorted the entire property market. The reason for this, is increasingly large numbers of people see it as a way of an alternative pension scheme, as they no longer have any faith saving in a pension scheme. The problem with this solution is not everyone can own another property to rent to someone else. This has helped push up the price of small properties, outbidding many first time buyers, who now have to rent becuase they can't afford to buy!

Real solutions to the housing crisis involve large scale building of family homes accross the country on greenfiled sites. Reducing the tax they take out of house purchase is vital if you want a free moving property market. The more expensive it is to move the less likely people are to move. I lend money to customers at my bank all the time for home extensions as often it is cheaper to build an extension than the tax it would cost to move. Obviously this is more likely in the South East where I live, but the high price of housing in the South East is probably costing the government votes than elsewhere.

With people less likely to move due to the cost of moving this restricts supply of housing on the market, reducing fluidity and increasing prices.

Any real solutions to the housing crises resolves around taking less tax, announcing a large scale council house building programme, and restricting the buy to let market.

But considering the stretched nature of the budget, what with all these NHS computer projects, ID cards, PFI schemes to pay for they are desperate for revenue and need keep control of spending (pity they did not think of that before) nothing is going to change. If they try and screw over the all those people who bought investment properties then they are in for a whole world of trouble.

Once there is a property crash then a lot of these problems will be solved or tax changes could be introduced without the government being blamed for triggering the crash.
 

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Any real solutions to the housing crises resolves around taking less tax, announcing a large scale council house building programme, and restricting the buy to let market.
I disagree.

In the UK property already carries very little taxation anyway. Maybe stamp duty is not the right type of tax because it is a transaction tax. Moving houses to cater for different needs at different life stages should not be discouraged. Yet to tax labour at 41% and money earned on house appreciation at 0% creates a massive distortion and favours those who already have property over those who have not. In fact, labour adds more value to an economy than property speculation, so I fail to understand why the latter should be fiscally promoted and the former fiscally punished.

I personally think a tax on property gains which finances a cut in the tax on labour would reduce the gap between those that are already on the real estate ladder and those that are not. This would also make the "buy to let" market less attractive for speculators.

I am also completely opposed to large-scale council housing building programmes. They just distort the market and create dependency on the state. The government should stick to its current roles, where it can do enough to resolve the housing crisis: simplify planning, provide adequate transport infrastructure to allow for densification and introduce a fairer taxation system.
 

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The answers in the housing market always lie on the supply side. We need more houses, whether they be council, shared ownership, private bought, private let then it doesn't really matter. We need to streamline planning, allow greater density and provide incentives for the construction of new builds.

I agree that second homeownership should be strongly discouraged through the tax system. As you say the current tax systems favours not the hard working poor who can't afford a house at all but the rich who have enough money to make property earn their living (a bit like the landed gentry used to). Stamp duty, as you say, is a transaction cost that simply reduces labour and housing market mobility at a time when flexibility is considered so important.
 

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The quickest and cheapest way to bring some sanity back to house prices is to insist that the purchaser of a property lives in it for a year or so. This would choke off the buy to let frenzy that buys up all those two bedroom flats and crap new build houses.

Without the the investment buyers housing companies would be encouraged to build properties that people actually want to live in, as opposed to just rent. At the minute they can throw up crap and know desperate investors are ready to buy them, competing with those looking for a home. This fuels house price inflation, forcing up prices, increasing the 'must buy now before prices go up even more' mentality that has gripped the market.

There is still plenty of demand out there from people who want to buy a home to live in so choking the buy to let won't kill the market. Covering vast swathes of green field land in houses will do little to correct the market just as building more roads does little for congestion. As with congestion the focus is rightly on reducing demand for roads not building more.
 

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I disagree.

In the UK property already carries very little taxation anyway. Maybe stamp duty is not the right type of tax because it is a transaction tax. Moving houses to cater for different needs at different life stages should not be discouraged. Yet to tax labour at 41% and money earned on house appreciation at 0% creates a massive distortion and favours those who already have property over those who have not. In fact, labour adds more value to an economy than property speculation, so I fail to understand why the latter should be fiscally promoted and the former fiscally punished.

I personally think a tax on property gains which finances a cut in the tax on labour would reduce the gap between those that are already on the real estate ladder and those that are not. This would also make the "buy to let" market less attractive for speculators.

I am also completely opposed to large-scale council housing building programmes. They just distort the market and create dependency on the state. The government should stick to its current roles, where it can do enough to resolve the housing crisis: simplify planning, provide adequate transport infrastructure to allow for densification and introduce a fairer taxation system.
Only your primary residence is free of capital gains tax.
Buy to let properties are subject to the tax. So introuducing capital gains tax on primary residences won't make any difference to the buy to let market and will just discourage people from selling their property.

I think people are foolish to invest so much of their equity into property, rather then spreading their risk over different investment products. The number of times I've heard people think that property is safer than stocks and shares or that it is always going to outperform other investments just makes me want to scream somtimes.

If faith could be restored in the pension industry then some of the pressure driving the buy to let industry could be reduced. Greater regulation of the buy to let industry, for example higher vigilance on correct valuations of buy to let properties. Greater deposit requirements or a bigger margin between rent achieved and mortgage interest payments, would reduce the number of mortgage issued.

Most countries in the world don't charge capital gains tax, or a have a reducing rate where the longer you own the property the less tax you would pay. By all means any suicidal government could introduce such a tax, but it would not survive long.
 

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If they cut taxes in other areas and it was clear that it was just a tax shift, the "property-heavy middle classes" would accept it. Problem is that Gordon Borwn does not have any credibility left in this respect. Consider his changes to empty-property rate relief, which I believe does make a lot of sense. Yet because he does not cut the taxes somewhere else to reflect the higher intake, it hit mainly on criticism:

http://business.timesonline.co.uk/tol/business/article1776540.ece
 

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Discussion Starter · #12 ·
New eco-towns to ease house crisis

http://environment.guardian.co.uk/energy/story/0,,2078559,00.html

Chancellor promises 100,000 low-emission homes to trump Cameron's green credentials

Nicholas Watt and Jo Revill
Sunday May 13, 2007
The Observer


Gordon Brown will make a dramatic bid to steal a march on David Cameron tomorrow when he pledges to build five eco-towns that will create up to 100,000 new homes powered by solar panels and wind turbines.
In a sign of his determination to undermine Cameron's reputation as a caring and green leader, the Chancellor will declare that only Labour can tackle Britain's growing housing crisis in an environmentally friendly way.

The eco-towns, the first of which will be in the south-east of England to ease chronic housing shortages there, will be modelled on the eco-villages proposed by the Prince of Wales in Cornwall. They will each hold between 10,000 and 20,000 new homeowners, with a total of 100,000 new homes.


In a nod to Cameron, who is installing a wind turbine on the roof of his new London home, Brown will announce that electricity for each house will be generated locally from sustainable sources, thus enabling buyers to escape stamp duty.
The first proposed eco-town will be built on the abandoned Oakington Barracks in Cambridgeshire, which was recently bought by English Partnership for £100m. In common with other new housing developments, the eco-towns will provide a mixture of private homes and social housing for the less well-off. They will be built on 'brownfield' sites, mainly derelict land, which will allow the Chancellor to reassure voters that he is not planning to destroy cherished 'green belt' land.

Brown said yesterday: 'If we are to meet the aspirations of every young couple to do the best for themselves and their children, then we need to build new homes, and we need to deliver well-planned, green and prosperous communities where they will want to live. And I say to those who always say "Yes but not here", you are denying people their rightful aspirations and you are condemning our children never to put a foot on the housing ladder.'

His remarks were aimed at Cameron, whose support for environmentally friendly house building is not matched, according to the Brown camp, by Tory controlled local authorities. They cite the example of Keith Mitchell, the Tory chairman of Oxfordshire County Council which covers Cameron's Witney constituency, who has reportedly voiced support for cuts in the current level of house building in the south-east.

'Michael Gove [the shadow housing minister] says he is in favour of housebuilding, but then says it is for councils to decide,' one source in the Brown team said. 'We want to work with councils - there are 40 which say they want to do this. We will be inviting councils from across England to come forward with plans to host the new towns.'

The announcement by Brown will be seen as a classic example of the way in which he seeks to draw a clear dividing line between himself and his opponents. He hopes to highlight the gap between Cameron's rhetoric and the Tory record on the ground to make a wider political point about how the Tories' warm words are rarely matched by action.

Brown believes the shortages in housing, which fuel rising house prices, will be one of the main challenges of his premiership. At least half of couples in their thirties need to borrow from their families to afford a deposit on their first home. This will rise to 70 per cent of couples by 2030.

The prince's model villages

In February, the Duchy of Cornwall submitted plans to the local council for an eco-village in Cornwall, a second attempt by the Prince of Wales to create an ideal village. Surfbury will lie two miles from surfing beach Fistral Bay and feature a primary school, railway station, offices, shops and 850 environmentally-friendly homes.

In 1993, the Duchy invested in construction of a model village, Poundbury, on the outskirts of Dorchester, Dorset. The design of Surfbury is similar, but the use of renewable energy, rainwater harvesting, locally-sourced and reclaimed materials will make it more eco-friendly.

Tim Gray, development director for the Duchy, said ' We want to minimise the impact on the environment by minimising carbon emissions and building a mix of shops, homes and amenities within walking distance that reduces reliance on the car.'

Surfbury might add to traffic congestion. The area has more than 750,000 visitors a year.

Rowan Walker
 

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The current distortions in the housing market are of this governments own makings. Stamp duty has not kept pace with house prices. Time was that very few paid stamp duty or only 1% when they moved. Now the average stamp duty in the South East is £8,000. The governments own targets in increasing density have been mainly met by building flats.

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The idea that stamp duty increases property prices is one of the most absurd things Ive read. Stamp duty does acts as a bit of a barrier keeping prices down when close to a band, so you wont see many house sell for 260k. And what's wrong with building flats?

How does less people moving restrict supply? Surely if someone moves from a first house and takes up a second house supply stay s the same at the end of it?
 

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The ecotowns seem quite a clever idea to me. Rather than just hitting a random two birds with the one stone - the eco side of it might make it desirable to the aspirational as well as the desperate, something a newtown might struggle to do.

Anyone like to guess what the architecture will be like? Will they stereotype the green buyers by building a twee Poundbury, go for something more modern or go for the usual barrat style homes (with adjustments fro insulation and suitable materials etc).
 

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The idea that stamp duty increases property prices is one of the most absurd things Ive read. Stamp duty does acts as a bit of a barrier keeping prices down when close to a band, so you wont see many house sell for 260k. And what's wrong with building flats?

How does less people moving restrict supply? Surely if someone moves from a first house and takes up a second house supply stay s the same at the end of it?
Stamp duty reduces liquidity in the housing market. If you are a first time buyer then it is hard enough scraping together finding a deposit never mind the stamp duty. As people move up the property ladder they have to pay a lot more tax. Most people don't have that money lying around. They effectively have to increase the size of their mortgage to pay for all the costs. This again reduces liquidity.

The problem with the buy to let market is it has encouraged the over provision of one and two bedroom flats. When almost half of new builds consists of such properties it creates imbalances in the market. If you can access property price trends in any town, you can see that prices of flats have risen much more slowly than houses. As people form families they generally want three or four bedroom house with at least some outdoor space and somewhere to park the car. With the price gap increasing between these two classes of properties its more difficult for people to afford that next step on the property ladder. Look at most estate agents in the South East and you see a glut of flats for sale, but family properties are scarce. I've interviewed plenty of people who are despairing of finding a nice family house.

The problems with the current properties being built has reached a state where various councils are now trying to restrict the construction of one and two bedroom properties, in favour three and four bedroom properties (not with much success though).
 

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The ecotowns seem quite a clever idea to me. Rather than just hitting a random two birds with the one stone - the eco side of it might make it desirable to the aspirational as well as the desperate, something a newtown might struggle to do.

Anyone like to guess what the architecture will be like? Will they stereotype the green buyers by building a twee Poundbury, go for something more modern or go for the usual barrat style homes (with adjustments fro insulation and suitable materials etc).
If you search under Northstowe you can find a lot planning documents for this new town. I assume most of the architecture will be tradional, but the space planning seems quite good. The street pattern has been designed so that every house is in walking distance of a bus stop and local facilities. But with exception of higher building densities and better mixed use design it is not any different from most New Town's. I don't see how any of this makes these developements Carbon Neutral.

Unless they introduce a commmunity wide heating system sourced from renewable sources and they ban cars, I can't see how such a title be accurately given. Or maybe they have pulled an iniative out of their arse slapped a label on a existing scheme and hope no one notices.

I know, I know, I'm a cynical bitch.
 

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If you search under Northstowe you can find a lot planning documents for this new town. I assume most of the architecture will be tradional, but the space planning seems quite good. The street pattern has been designed so that every house is in walking distance of a bus stop and local facilities. But with exception of higher building densities and better mixed use design it is not any different from most New Town's. I don't see how any of this makes these developements Carbon Neutral.

Unless they introduce a commmunity wide heating system sourced from renewable sources and they ban cars, I can't see how such a title be accurately given. Or maybe they have pulled an iniative out of their arse slapped a label on a existing scheme and hope no one notices.

I know, I know, I'm a cynical bitch.
The "eco" aspect is mainly there to address the wave of eco-consciousness Cameron has started. Living in a so-called zero-carbon house gives people a good conscience but it is not going to stop global warming, with China building over 50 coal-powered electricity stations just this year. I am not saying it should not be done, but to believe it is going to address the global warming phenomenon is naive. The building industry itself is one of the largest contributors to carbon emissions, so a first step would be to build durable houses. Most other techniques can be borrowed from the Victorians, Victorian houses, even with single glazed sash windows, are better than anything contructed since in terms of energy efficiency. The Prince of Wales does have a point at the end of the day.
 

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Stamp duty reduces liquidity in the housing market. If you are a first time buyer then it is hard enough scraping together finding a deposit never mind the stamp duty.
There are plenty of lenders out there willing to lend 100%+ mortgages.

If you take away stamp duty the cost of housing will rise by at least the equivalent amount, if not more.
 

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Stamp duty reduces liquidity in the housing market. If you are a first time buyer then it is hard enough scraping together finding a deposit never mind the stamp duty.
There are plenty of lenders out there willing to lend 100%+ mortgages.

If you take away stamp duty the cost of housing will rise by at least the equivalent amount, if not more.
Not that many actually, The lower the equity you have the greater the banks risks and therefore the higher interest rate you have to pay. Also banks offering 100% will lend on a lower income multiple and generally only to the best credit risk. So it is not much use for a lot of first time buyers.

Any charge levied increases costs and so therefore reduces the likelyhood it will occur. The higher the tax the lower the activity. Especially as moving home is an avoidable expense, you can choose not to move or even buy in the first place. Its not like its an increase in income tax or VAT.

Reducing liquidity in any market is bad as it reduces prices signals and the ability to reallocate resources. I would argue that the buy to let market and low interest rates have had a greater impact on prices.
 
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